Western India Regional Council of
The Institute of Chartered Accountants of India

Law Update Details

 
March 2019 CA. Manoj Shah, CA. Sudha G. Bhushan & CA. Mitesh Majithia
 

External Commercial Borrowings (ECB) facility for Resolution Applicants under Corporate Insolvency Resolution Process


A.P. (DIR Series) Circular No. 18 dated February 07, 2019


As per new ECB framework, ECB proceeds cannot be utilised for repayment of domestic Rupee loans, except when the ECB is availed from a Foreign Equity Holder.


RBI has, in consultation with the Government of India, relaxed the end-use restrictions for resolution applicants under the Corporate Insolvency Resolution Process (CIRP) and allow them to raise ECBs from the recognised lenders, except the branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target company under the approval route. Accordingly the resolution applicants, who are otherwise eligible borrowers, can forward such proposals to raise ECBs, through their AD bank, to Foreign Exchange Department, Central Office, Mumbai of the Reserve Bank for approval.

 

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